bits & bytes - Ping! Zine Web Tech Magazine

likely move to the most expensive
Non-Qualified category, regardless of
whether it was swiped or hand-keyed
by the cashier.
Step 2: Understand how these rates
work with your business.
Because most of you reading
this article are probably not selling
hockey sticks in a retail environment,
it is worthwhile to review how these
rate categories affect internet based
transactions.
The first thing to understand is that
processing rates are generally higher
for an internet merchant than for a
merchant that swipes all transactions.
Typically, internet transactions are
classified as Mid-Qualified in the case
of consumer cards, or non-qualified if
they are reward program or corporate
cards. So, if you do not swipe credit
cards in a face-to-face setting, and
someone is trying to sell you on a
1.64% Qualified rate, you’re probably
best to run away, because very few (if
any) of your transactions will be in this
rate category!
Unfortunately, a great many
merchants are lured with low Qualified
rates, while the Mid-Qualified and
Non-Qualified rates are significantly
higher. To avoid surprises on your
monthly merchant statement, it’s
critical that you understand all possible
rate categories and how your processor
will classify transactions.
Once you are satisfied with your
Mid-Qualified and Non-Qualified
processing programs, you want to
ensure that you receive the decreased
cost for “offline” debit transactions. As
we stated earlier, Visa and MasterCard
lowered the costs for these rates,
however most processors are not
passing the savings to the merchant.
This is particularly distressing in light
of our research – we have found that
the average hosting company accepts
internet debit payments for as much as
thirty percent of their overall business.
Moreover, after having seen hundreds
of credit card processing statements
specifically from hosting companies,
we can report that only a handful
of them have had the Internet debit
rate correctly segregated, and even
fewer have had the appropriate cost
associated. Thus, leveraging the new
rate structure can almost always have
a very positive impact on your bottom
line.
Step 3: Make the new debit rate
work for you.
The easiest way to confirm that you
are receiving the decreased cost for
debit sales is to review your monthly
merchant statement. The debit rate
should be identified as a separate
category, and be billed at a lower rate
than your other sales. One still needs
to be cautious, however! We have seen
numerous advertisements and emails
trying to lure in companies, by offering
a low two-tiered plan. In other words,
they offer a median priced Qualified
and Non-Qualified rate, but they are
not reporting a Mid-Qualified or Debit
rate. In cases like this, the processor
is capitalizing on your debit sales
as opposed to passing the additional
savings on to your business.
To avoid the problems of a two-tiered
system, be sure that you work with a
three-tiered program: one that provides
you the cost for a Debit transaction, a
Mid-Qualified transaction, and a Non-
Qualified transaction.
To view a few examples of
competitive debit rate programs being
offered in this hosting industry, visit
either 1) ModernAuthorize at http://
www.modernauthorize.com (Click
on the American flag) or 2) SWsoft
at http://www.bluepay.com/landings/
swsoft/programSWsoft.html
Step 4: Make sure you are partnering
with the right providers.
Akin to almost any product you
purchase for your business, the closer
you get to the source, the lower your
transaction processing cost will
be. Unfortunately, many hosting
companies purchase their payment
processing services from sales agents
and/or resellers that may be three or
four levels down from the source.
That means your business is filling
the pockets of those independent sales
agents, as opposed to building your
bottom line.
It can thus be very valuable to find out
from who you purchase your payment
gateway and merchant account. If you
are not buying from the source (i.e.
the direct merchant account provider
and the author/development company
behind the payment gateway), it may
be time to look for another provider.
By taking this step, you will inevitably
be able to save on your processing
costs. P!
PING! ZINE WRITER BIO
BluePay is a market-leading provider of direct payment processing
solutions. With a focus on the ISP and Hosting markets, BluePay
offers some of the most cost effective payment processing
solutions available today. In addition, BluePay can customize
their payment gateway to address any payment-processing
environment. You can contact BluePay at http://www.bluepay.
com or toll free at 866-613-5422.
www.pingzine.com 53